I already posted comments below today’s Gold Trading Alert on Golden Meadow, but to make sure that everyone is on the same page, I decided to send out the extra notification also using our old system.
In short, gold rallied after today’s CPI numbers, which were lower than expected. This likely made investors expect more dovish Fed, and this, in turn, pushed gold higher, and the USD Index lower.
However, is the USD Index really going to move lower from here?
I doubt that. The support provided by the 2016/2017 and 2020 highs is very strong, and it's much more likely that this attempt to break below them will be invalidated, than it is that it would be confirmed. In fact,"confirmed" is the name of the game here. It's just a few hours after the move - it could be reversed shortly or for example tomorrow, which would serve as yet another buy sign.
Besides, please note that back in August, the USD Index also broke below its initial low in order to form its final bottom.
As far as the precious metals market is concerned, gold, silver, and mining stocks continue to provide the same indications from their relative valuations. Gold moved above its early-December high, silver is well above it, but miners only moved back to those highs and then declined once again.
Something else also happened today. Bitcoin moved back above its June low. Remember when I wrote that bitcoin was likely bottoming in mid-November? Today’s move confirms that it’s likely the case. And as cryptos move back up, junior miners’ shine is likely to fade away.
Also, you might be wondering, what could cause gold to decline despite today’s CPI numbers.
My take is that there doesn't have to be a specific reason. Or at least not a reasonable one. Given the current technical picture, gold miners can slide simply because investors realize that today's CPI is not favorable enough to make Fed dovish, and that real rates are going higher. And the latter – real interest rates are one of the two key drivers for gold prices.
Also, I would like to invite you to my first-ever live webinar for premium subscribers. It will take place on Thursday, Dec. 15, 2022 at 10 AM EST (which is 4 PM CET), on our new platform – Golden Meadow:
https://www.goldenmeadow.eu/c/pr-s-free-events/top-3-gold-trading-techniques-live-market-coverage
The above link will allow you to “reserve your seat” at the event. Of course, you’ll need to make sure that you have a Golden Meadow account in order to proceed. In fact, those who already had opened accounts on that platform, have already received invitations several minutes ago.
The webinar will have a chat, so you’ll be able to ask questions in real time. I plan to first cover top 3 gold trading techniques, and then I’m going to move to the live coverage of whatever the market provides us with on Thursday.
I’m looking forward to “meeting” you on the above-mentioned live event!
As always, we’ll keep you - our subscribers - informed.
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief
